Many of the problems with foreign aid stem from two interrelated accountability dilemmas. On the one hand, in deciding on aid policies and interventions, donor agencies are accountable to their own parliaments and domestic pressure groups rather than to foreign aid beneficiaries in recipient countries. On the other hand, their resulting focus on short-term targets and results can undermine efforts to build the institutions needed for the long-term sustainability of development outcomes. These dilemmas generate some ‘contradictions’ that are very difficult for donors to avoid and that have consistently undermined aid effectiveness.

This paper offers a set of ideas and suggestions for rebalancing accountabilities in development assistance. These span from the need to provide more development assistance through multilateral institutions and to finance it with independent and direct sources of revenue, to identifying necessary reforms in donor agencies aimed at designing more appropriate aid interventions.